Thursday, January 11, 2007

Realtorese of the Day: $96,000 Price Drop = Price "Stability"

Realtor data as published in the Tracy Press:

The Central Valley Association of Realtors reported 1,788 existing houses sold in Banta, Tracy and Mountain House by late December. It’s about half as many as in 2005, and the median price of a home dropped from $580,000 in the second half of 2005 to $530,000 in the second half of 2006 [-8.6%].

In Ripon, prices have dropped about $100,000 from the same time last year, from $546,000 to $450,000 [-17.6%], though that city also sees only 10 to 20 home sales a month, compared to more than 100 per month in Tracy.
Realtor response:
Marge Imfeld of Re/Max Executive in Ripon and a board member with the Central Valley Association of Realtors said she sees this as a much-needed correction in the market and expressed relief that prices have leveled off.

“If you look at the previous three years, 30 to 40 percent increases in property values in a year is excessive,” she said. “I truly believe I’m starting to see a stability in property values.”
Non-Realtor definitions:
  • stability = the quality, state, or degree of being stable
  • stable = firmly established : fixed, steadfast; not changing or fluctuating: unvarying
  • level off = to approach or reach a steady rate, volume, or amount

11 comments:

John L. said...

Bubblebloggerese of the Day: "Starting to see" equals "=".

Two bubble bloggers are lost in the woods, looking for a house so they can eat or phone for help. One bubble blogger says, "I think I'm starting to see the outlines of a house!"

The other bubble blogger says, "I told you you're a house."

drwende said...

In fairness, you could read the realtor's remarks to mean that she's relieved prices have leveled off after dropping and that now she thinks they've stabilized at a more realistic lower number and will stop dropping.

Not that realtors are incapable of lying or being self-delusionary, but I just wouldn't assume the Tracy Press is writing the best and most unambiguous prose in the Valley.

Anonymous said...

The sky is falling, run for the exits. God help all those f@ucked borrowers.Back to flipping burgers and pimping @ walmart.

Max said...

Have you seen the Bee towers article?

Towers project on hold

Construction has stopped on downtown Sacramento's most ambitious development project ever -- two 53-story condominium and hotel towers planned for the foot of Capitol Mall.

In a sign of developer John Saca's ongoing financial struggle to build his skyscrapers, several contractors filed liens against him in the past week for unpaid bills totaling $7.3 million for such items as architectural work and pile driving.

Hit with millions of dollars in cost overruns, Saca is seeking additional financing. Without it, he likely won't be able to close on his $375 million construction loan from Deutsche Bank.

...

While his sales have slowed in recent months with the slump in the residential market, Saca is very close to meeting the Deutsche Bank requirement that he presell 400 units. According to Hanley Wood Market Intelligence, a Costa Mesa-based housing analyst, he had collected non-refundable deposits on 383 units as of November.


I wonder how open-ended that Deutsche financing is? Aren't there people trying to flip these condos as we speak? How realistic is the 383 number?

Max said...

Check that: there are 16 towers units in the MLS right now.

Dr Housing Bubble said...

Up is down and down is up. Black is white and war is peace. Are we living in Orwell’s 1984? According to these realtors we are. If you read their statements it is as if you are in some sort of crack induced daze. Inventory is building, prices are declining, and appreciation is zero to negative and we are in a healthy and stable recovery? Yes my fellow bubble readers, we are fools to think that prices going down simply mean that we will have more pent up demand and a bigger jump in the summer; because the more you go down the more you go up. These are the laws of housing according to the real estate selling machine.

There is so much hope that the second half of the year will bring the 2nd coming of the housing gods that these folks are blind to the reality of what is going on. Inventory is rising, prices are declining, and appreciation is zero to negative. Does this sound like a recipe for a 2nd half bounce?

Dr. Housing Bubble

patient renter said...

I was just talking to an old friend yesterday and found out his company was working as a sub doing ground soil testing/measurements on the Towers project for the foundation buildup. From what he could told me, everyone on the ground there has known for quite a while that it was just a matter of time before this thing was halted due to lack of funds. Apparently the main construction management had already been replaced once due to financial issues/disputes and there were numerous other financial issues with various subs.

He also told me some interesting things about the progress with building a foundation so close to a riverbed, and how the pylons needed to be unusually long (80 meters or so) to make it to stable sedimentary layer.

anon1137 said...

DHB: From where I'm sitting (central Sac resales), inventory is going down, not up. Foreclosures are going down too.

After reading Wasserman's article today about new home sales last 1/4, I can see why sales have been so slow in the 'hoods - the deals on new homes are pulling buyers away from the older neighborhoods. Pretty soon, sellers of existing homes will have to start lowering their prices to compete with the builders. Then it will be both the builders AND the resale market driving the train wreck, instead of just the builders.

Also, about the Saca article, I told Lander 6 mos. ago he should put a live webcam shot of 3rd & Capitol Mall on his web page as a symbol of the Sac housing bust. I'm still waiting for that.

Anonymous said...

anon1137--"Foreclosures are going down too."

You mean up right? Take a look at http://sacrealstats.blogspot.com/ for an article on this very issue.

anon1137 said...

No, I mean down. According to Realtytrac.com, auctions for the city of sac have been holding steady around 500 for the past several months and preforeclosures have been dropping since last summer.

As always, your perception of the market depends on where you are looking. Max's stats are for a much broader area than just the city of sac.

karl marx brothers said...

I would bet a weeks salary that the few remaining Saca condo units needed to sell (what, a dozen or so ? ) suddenly close escrow with a few extra just so it all looks legit.
No straw buyers ... nahh of course not .. just need to convince Deutsch Bank everything is on the upswing for that promised funding.
Double-down as to Sac officials pressuring & calling in all favors to bring this white elephant to completion.